Hedge Fund Uses CDO Magic to Transform Fannie Mae Junk Debt

Updated on
  • Bayview borrows against Fannie Mae, Freddie Mac CRT notes
  • Asset-backed deal could be duplicated by other managers

A Florida hedge fund transformed risky Fannie Mae and Freddie Mac debt into investment-grade securities, and it could end up helping the mortgage giants’ efforts to offload more of their risk.

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